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TMI Blog2012 (7) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... , was processed u/s 143(1)(a) of the Income-tax Act, 1961 (hereinafter referred to as the Act), on an income of Rs. 29,70,83,960/- vide order dated 16th March, 1999. Inter alia, the following prima facie adjustments were made: [In Rs.] a) Capital expenditure debited to P&L A/c Rs. 5,090,334 b) Trade tax payable Rs.1,306,643 c) Professional Tax payable Rs. 26,590 d) Bonus Rs.13,517 e) Employer's contribution to PF Rs. 44,377 Total: Rs.6,481,461 2.1 Subsequently, the assessee filed an application u/s 154 of the Act, pointing out that the aforesaid adjustments were not contemplated u/s143(1)(a) of the Act. However, the Assessing Officer[AO in short] did not accept the submissions of the assessee and rejected the said application in the following manner:- "Capital expenditure debited to P&L account: In the Tax Audit Report, the auditor has identified the amount as capital expenditure. The details of the same have been furnished in the Annexure 1 to the Audit Report. Accordingly, the same was clearly disallowable u/s 37(1) of the Income-tax Act. Since the items constituting the said amount have not been shown as bad debts, as claimed by you in the application, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. ITO 189 ITR 339 PP. 343-44 have upheld the above view. The Bombay High Court in the case of Khatau Junkar Ltd. V s. K.S. Pathania 196 ITR 55 pp. 68-69 have held that the Assessing Officer had no power to go beyond or behind the return, accounts or documents, either in allowing or in disallowing any such deduction, allowance or relief. The Allahabad High Court in the case of Pradeep Kumar Her Saran Lal Vs. Assessing Officer 229 ITR 46 at pp. 53 have held that the Assessing Officer could not touch upon debatable and controversial Issues. The Delhi High Court in the case of S.R.F. Charitable Trust Vs. Union of India 193 ITR 95 at page 98-99 have held as follows:- "So far as clause (iii) of the first proviso to section 143(1)(a) was concerned, it clearly provided that the Assessing Officer could make an adjustment to the income and loss declared in the return if on the basis of the information available in such return, accounts or documents, the deduction, allowance or relief claimed as prima facie in admissible. The conclusion that the claim of the assessee was in admissible must, in other words, flow from the return as filed. No power was given to the Assessing Officer to disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a) of sec. 143 of the Act and the ld. CIT(A), without analyzing the facts of the case, deleted the adjustments nor demonstrated as to how these adjustments were debatable and controversial. 5. On the other hand, the ld. AR on behalf of the assessee submitted that since the assessee did not add back the capital expenditure written off or the other amounts like trade tax payable, professional tax payable, bonus, employee's contribution towards the PF, the AO made these adjustments. While relying upon decisions in CIT vs. Amitabh Bachan Corporation Ltd.,261 ITR 45 (Bombay);CIT vs. Modi spinning & Weaving Mills Co. Ltd.,258 ITR 65 (Delhi);SRF Charitable Trust vs. Union of India & Others,193 ITR 95 (Delhi); and Shriram Honda Power Equipment Ltd. vs.CIT & Another,258 ITR 1(Delhi), the ld. AR supported the findings of learned CIT(A). 6. We have heard both the parties and gone through the facts of the case. As is apparent from the facts of the case , the AO while processing the return u/s 143(1)(a) of the Act on 16.3.99 made the aforesaid adjustments on the basis of information provided in the tax audit report, annexed with the return. Before proceeding further, we may have a look at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustment under the said proviso can be made. As an illustration, it was pointed out that if, in a case, proof in support of the claim was not furnished by an assessee, then for the lack of proof, no disallowance or an adjustment could be made under the said provision and the only option left to the Assessing Officer in such a case was to require the assessee to furnish proof by issuing a notice under section 143(2) of the Act. It is also well established that the question of prima facie adjustment under section 143(1)(a) of the Act has to be considered with reference to the date on which the return of income is filed and not with reference to events subsequent thereto. A similar view was taken in Modi spinning & Weaving Mills Co. Ltd.(supra) while holding that if no proof in support of a claim was available with the Income-tax Officer, he could have issued a notice under section 143(2), but he could not have unilaterally made this disallowance by seeking to invoke the provisions of the first proviso to section 143(1)(a) of the Act. 6.2 Hon'ble jurisdictional High Court in their decision in Shriram Honda Power Equipment Ltd (supra )while interpreting proviso to sec. 143(1)(a) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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